The Ticketing of Tomorrow: How the Marketplace is Changing

The past year has
demonstrated that the live event industry is as vital and popular as ever.
According toBillboard, Ed Sheeran’s 2018 Divide Tour grossed more than $429
million, breaking an all-time record for the highest-grossing solo tour and
highest year-end gross ever. His North American promoter, Louis Messina, was
also responsible for big touring numbers for Taylor Swift, Kenny Chensey, Blake
Shelton, Eric Church, George Strait and Shawn Mendes, among others, that
totaled $670 million across 268 shows and 5.2 million tickets.

With such large metrics,
the concert industry has shown that consumers are still hungry to spend money
on live event experiences. Findings from arecent Nielsen report also support this
sentiment: 52% of Americans attend some form of live music event each year.
While live event attendees spend an average of $247 per year on tickets—in
addition to spending on merchandise, music, and alcohol—the reality is that it
likely means two events a year as primary ticket prices have soared.

What all these numbers
reflect is the push and pull of primary and secondary markets on pricing, with
fans’ access to tickets teetering in the middle. The potential solutions to
these issues aren’t black or white, but grey.

Take Swift’s global Reputation stadium tour. She grossed
$315 million dollars on a tour that, for the first time, attempted a “slow
ticketing” onsale which saw dynamically priced tickets rolled out at
sticker-shock prices. Though it was Swift’s most financially rewarding tour to
date, thanks to the aggressive pricing that stymied secondary sales, some dates had thousands of unsold tickets.
That’s a less-than-ideal experience for an artist and their fans when the
expectation is a sold-out show. The balance of revenue versus volume is off
kilter.

Then look at Garth
Brooks’ approach to combating the secondary while keeping ticket prices
affordable: readily acknowledge that you’ll keep adding shows in any given
market to meet demand. What this translated into was a three-year tour in the
U.S. where Brooks performed 390 shows, sometimes two in a day, to sell more
than 6.5 million tickets at an average price of around $60. Doing this on an
arena-level scale was unheard of but it was highly effective in nullifying the
secondary market and making sure his fans got tickets at the price he wanted to
charge.

Clearly, Swift and
Brooks are outliers when it comes to pricing and ticket distribution. So how
does the rest of the industry balance demand and pricing in 2019?

The answer is both
technical and philosophical.

Despite advancements in
ticketing over the last several decades, it is only now that solutions exist to
solve for some of its most difficult problems.

Specifically, for years,
ticketing platforms have issued tickets as PDFs—easily duplicated,
non-trackable files. As physical commodities, they are significantly more
susceptible to fraud than traditional tickets as a broker can resell the same
ticket multiple times and only the first one scanned at the venue is admitted.
Moreover, the understanding of the customer begins and ends with the initial
purchase as there’s no way to tie their identity to the ticket.

Intertwined with this
reality is that fact that primary ticketing companies are economically incentivized
to keep tickets within their own ecosystem not only to capture resale revenue
but to get a more comprehensive understanding of end-users who actually attend
the event.

The industry is
increasingly moving toward identity-based tickets that act as a license to
enter an event. Similar to airline tickets, these tickets are not just a
barcode that anyone could duplicate and resell at will but rather come with
flexible rules and restrictions that determine how, where and for what price
they can be resold or transferred. This protects the ticket and enables content
owners to know exactly who uses the ticket. This powerful data can be leveraged
for better marketing, more relevant sponsorships, and increased safety and
security within the venue.

This new ability to
effectively track and control the journey of a ticket from sale to redemption,
regardless of how many times it’s resold or transferred, gives artists the
ability to manage their tickets in ways that allow them to anchor themselves at
the axis between fans and ticket pricing.

For years, a vast amount
of consumers have checked secondary sites such as StubHub and SeatGeek for
ticket availability before ever visiting primary ticketing websites. Secondary
sites such as these have succeeded due to their effective marketing, ease of
use and readily available inventory.

The excessive
stigmatization of the secondary market misses the reality that a vast amount of
tickets go unsold—about 40 percent in total. Without the secondary market,
which is often selling tickets at below face value, that number would soar even
higher. To date, a large part of secondary markets’ success has been due to the
fact that they can adjust ticket prices in any direction at any time.

Unrestricted in where
and how tickets can be sold, secondary companies have become massive
distribution hubs, drawing eyeballs from smaller secondary websites as well as
media and other ecommerce companies looking to offer their visitors access to
tickets.

At the behest of
artists, promoters and venues, this has, in turn, forced primary ticketing
companies to become more amenable as to where and how tickets are sold outside
of their websites whether that’s API development or allowing tickets to be sold
off-platform.

With the development of better technology, any and all distribution channels can be used to sell those tickets and all involved can know who’s purchasing them and ultimately using them.

The practical shift in how to effectively sell more tickets has led to a broader philosophical one. It’s not about the primary market versus the secondary market anymore—it’s simply about the market.

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